CBO Report Hurts Senate HELP Committees Reform Attempts

By: Clarissa Crain, CIS Compliance Director
clarissacrain@cis-partners.com

The week of June 15th through the 22nd proved to be pivotal for the movement forward of the Administration’s attempts to reform the health care system. With both victories and setbacks, the future scope of health care reform remains in question. The Congressional Budget Office (CBO) released findings that showed that the Senate HELP Committee’s proposed “Affordable Health Choices Act” would cost an exorbitant amount of money, far more than the Administration had estimated, and not yield the increase in coverage sought by the Administration.[i] At the same time, the Administration witnessed a huge win when PhRMA members agreed to pay $80 billion towards Medicare Part D over the next ten years (see Katie Lapin’s recent blog article, Good PR for Pharma). The administration is left in the wake of last week battling back against criticism of the current health care reform attempts based on the CBO’s findings, while trumpeting the ‘victory’ in increased financial support by the pharmaceutical industry for Medicare Part D.

From a perspective of understanding where health care reform stands and how the Senate HELP and Finance Committees are doing in their efforts to move legislation through Congress and onto the President’s desk by October, it is important to understand the recent CBO report.[ii] The legislation presented to the CBO by the Senate HELP committee was found to miss the mark both financially and on the Committee’s insured targets. The CBO found that the HELP Committee’s “Affordable Health Choices Act” would only extend health care coverage to an additional 16 million Americans, while costing a higher than expected, $1 trillion, between 2010 and 2019. The CBO’s findings shocked the HELP Committee and left supporters of the Committee’s efforts reeling.

In reviewing the findings of the CBO, it is apparent that the legislation presented to the CBO for review is missing key components that were previously cornerstones of the proposed legislation. Speculation is that these key components: the public plan, the employer mandate, and the individual mandate, were left out of the bill to help gain bipartisan support.[iii] However, by leaving out these components, the HELP Committee left out components that were projected to drive substantial increases in insured persons. Also interesting to note for those in the Medicaid space, there was no mention in the CBO’s report of the increase in the Medicaid Drug Rebate Amount for branded or generic drugs, as outlined by the Senate Finance Committee’s white paper issued in late May.[iv]

As of late last week the Senate HELP Committee was looking to draft and submit updated legislation to the CBO for review, in hopes that the updated legislation would bring them closer to the goals originally outlined by the Administration. Until then, it is likely that the introduction of health care reform legislation will meet strong resistance.

Sources:
[i] http://www.cbo.gov/ftpdocs/103xx/doc10310/06-15-KennedyLetter.shtml
[ii] http://kennedy.senate.gov/newsroom/press_release.cfm?id=1D9CB1D9-42F6-4FA0-81A8-00F645381877&type=archive
[iii] http://voices.washingtonpost.com/ezra-klein/2009/06/did_the_congressional_budget_o.html
[iv] http://finance.senate.gov/sitepages/leg/LEG%202009/051809%20Health%20Care%20Description%20of%20Policy%20Options.pdf